It’s a given that merchants would be annoyed that the new U2 album Songs Of Innocence is being offered free to a half billion iTunes consumers for an exclusive five-week window. But in the days after the Sept. 9 announcement, those same retailers were in hot pursuit of details about what Interscope and the Universal Music Group would give them to offset the exclusive.
As it turns out, brick-and-mortar retail will get a deluxe package with four additional songs and two to seven acoustic versions. (The final number has yet to be determined.) The Songs of Innocence CD will carry a $12.90 wholesale price, which translates into a $19.98 list price. That means consumers will likely see it priced at $15-$16 in stores.
Brick-and mortar merchants, as well as music streaming services, will get the bonus tracks for a five-week window, just like Apple had on the non-deluxe version, after which iTunes will also get the additional bonus songs.
In addition, retailers will be offered catalog deals that will discount the entire U2 catalog from front-line to mid-line, which means that U2 albums will be about $3 cheaper in stores for a period. iTunes is already offering its customers the U2 catalog at discounted prices and their customers have responded by placing 20 U2 titles into the iTunes top 200 chart, proving there is strong demand for all of the band’s music.
Despite all the maneuvering by Interscope and UMG to placate unhappy retailers, some merchants are debating whether to support U2 on the album. When Beyoncé gave iTunes an exclusive window on her last album, Target refused to carry it, while Amazon refused to stock the CD version, although it did carry the MP3 version. Target and Amazon declined comment.
Besides merchants, some competing major label executives say the move devalues music.
“I’m not sure that this giveaway is good for the business,” says one senior label executive.
Another says it will hurt smaller artists, who still count on sales revenue. But UMG insiders counter that anyone of that opinion simply is not in touch with the music market, which is moving to an access model. Moreover, in the modern music industry, many view the album as a loss leader for the real paydays provided by touring and merchandise, among other revenue streams.